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7 Reasons a Business Must Plan For Success


Planning is an unnatural process; it is much more fun to do something. The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression. (Sir John Harvey-Jones)

You usually know what you want to do with the business, and you have an idea of what it should look like.   You might have even told your staff what the plan is.   But getting the business to that point is often the hard part when you are involved in the daily grind of interruptions, phone calls, meetings, covering holidays, solving problems and dealing with customers and suppliers.   Essentially a business plan is a road map on how you get to the point you want to be and why you want to get there.

On its own a plan won’t increase sales or cut costs or improve efficiency.   That requires people to take action.   A business plan helps focus people on the right tasks, provide a tool for monitoring what has been completed and provide a basis on which decisions can be made on the right actions to be taken.   After all, in business it is not what you know but what you do that counts.   And most business managers and owners are correct in saying that they know what they have to do, it is getting it done that is critical to success.  

A properly constructed business plan can help get the right things done.   This article explains seven key reasons to have a written business plan, and demonstrates the sorts of outcomes a manager should expect from the planning process.   The key reasons a business should have a written plan are:

1.        Provides a management tool to monitor and measure performance
2.        Provides clarity in what the whole organisation is doing
3.        Builds commitment and helps communication
4.        Provides focus
5.        Ensures accurate and correct analysis
6.        Provides a framework and foundation for future decisions
7.        Minimises risk 

Management Tool

We all make “to do” lists, so that we make sure we get done what needs to be done.   A business plan is a very detailed set of “to do” lists that can be a very useful management tool if used properly.   At the very least it should contain a set of action plans that move you to your vision or aim.   These action plans should be reviewed with people at least monthly or preferably more often.   We all know the saying “what gets measured gets done” – it is the same with action plans.   What gets reviewed gets done, and having a system for reviewing your business plan actions becomes that management tool.

The review system can also monitor the analysis contained in the plan to check for any changes in markets, technology or other areas that may impact the plan outcomes.   By assigning this role to key staff, they become custodians of the business success. 

Clarity

Clarity comes from people understanding why, when and where things are done.   A business plan is meant to be a process that delivers that clarity.   The final document is meant to explain to people why you want to be the leader in widget technology, or why the target markets are stay at home mothers between the ages of 24 and 33.   When people understand these factors, their decisions on what to do and how to do it become clear to them. 

Clarity in your business helps your customers also to see what value you deliver.   Having a clear business plan provides a greater chance that the processes and products that your customers see meet their needs, deliver on their expectations and advertise a sense of comfort and confidence that you and your staff know what they’re doing.

Building Commitment and Communication

Commitment comes from communication, and communication comes from involvement.   Business planning is more a process than a document, and the process of involving your staff is the key to getting communication and commitment.   Once people have had a chance to have an input to the decisions being made, have been involved in the analysis and helped develop clear action plans, people become committed to the cause. 

Commitment also comes from internalising what is required.  Internalising is a process where people intuitively become aware of what must be done and why.   It comes from people being involved and active in the development of the ideas and understanding the analysis behind them.    The process of writing plans and actions down on paper allows the mind to process the information.   The mind is doing two things: telling the body to physically write down the information whilst at the same time thinking about it.   This process “internalises” what is being dealt with, and builds the ownership and commitment your require for success. 

Focus

"The sun's energy warms the world. But when you focus it through a magnifying glass it can start a fire. Focus is so powerful!" - Alan Pariser

The core outcome of any planning process is to focus on what is needed and desired.   A business plan provides all staff with a clear focus on what must be done to achieve the vision.   This focus comes from seeing what the priorities are, which target markets are critical to success, what operational efficiencies must support a profitable business and what priorities are in the action plans. 

To achieve this focus, the plans must be clear themselves and the document must be well laid out.   This occurs when you use a systemised process for planning.   One that has a clear methodology and people are guided through the process.   Planning should not be a mystery, but a clear process for showing the way.   As said earlier, one of the outcomes of planning should be increased clarity in your business.   This cannot be achieved without clarity in the process used.   Having a clear process and outcomes also helps to generate the right focus for your business and your people. 

Accurate & Correct Analysis

"...I ask people if an elephant has ever bitten them. Most of the time people say no. But everyone has been bitten by a mosquito. It's the little things that get us." - David DeNotaris

The devil is always in detail, but it is elephant issues that will kill any business.   What this means is that your planning process must rigorously analyse your current situation, what drives your business and what it means for the future.   But the analysis should be cost and time effective.   It should not go into so much detail that it removes the clarity, take too much time or be too costly.   It should pick out the elephant issues, but provide enough detail for people to agree on the conclusions and develop action plans to suit the outcomes. 

As stated earlier, writing down your plans helps internalise them.   This also goes for the analysis of your business.   Writing down your analysis and the outcomes of the analysis allows people to check it to make sure it is accurate and correct.   This also internalises the information to help create clarity, focus, commitment and communication. 

Future Framework

A business plan becomes evidence that a structured process has been followed, is the basis for growth or future decisions and provides a framework for people to develop the ideas further.   A business plan is not simply a long explanation of why you are following the path you have chosen, it is a reasoned development of the ideas and trends that are relevant to your business.   This doesn’t mean things won’t change – they will.   But as markets trends alter, technology develops and external issues change your business must change too.

The business plan allows you to quickly review the situation and adjust for changes, based on the reasoning and analysis that has been completed.   This means adjusting your strategy can be quick, effective and reliable.   The plan becomes the future decision making framework for your business.

Minimises Risk

"If a man take no thought about what is distant, he will find sorrow near at hand." - Confucius

Risk is the potential for realization of unwanted, negative consequences of an event.   From a business perspective often the unwanted negative consequences ultimately involve the bottom line.   So managing these risks becomes a important to minimise the potential losses.   You can’t do any risk management from a point of ignorance, you need to know what potential events can occur and what the consequences can be.   This is where business planning helps.   

The threats and weaknesses of a business represent the obvious risks.   But so to are the opportunities you fail to realise or capture; or the strengths that your competitors copy off your business.   These are the key outputs of the business planning process, and when combined with discussion and action plans becomes the basis for effective risk management.   More detailed risk management planning can still be undertaken, but this then becomes part of the overall management of the business and assessed in conjunction with all the other priorities.
What Next? 

It is always wise to look ahead, but difficult to look further than you can see. (Sir Winston Churchill)

"People often say that motivation doesn't last. Well, neither does bathing - that's why we recommend it daily."
Zig Ziglar


Answering “what if” questions can be hard for some people.   They want to get on with the action, get things done, make it happen, get results.   But in business it is not just getting results, it is getting the right results.   This can only come from doing the right actions.   A business plan helps the whole business to do the right actions and get the right results. 

It doesn’t guarantee that your business will not have to re-evaluate the strategy, adjust the tactics or continually strive to renew people’s enthusiasm and commitment.   But it does provide a process, a management tool, a methodology and a framework for ensuring you continually plan for success and not just hope that events and circumstances will “fall your way”. 

The process of reviewing your business, making decisions and writing down your plans is more likely to produce a positive outcome using a process that gets people involved and encourages the formal writing of plans and developing strategies.   The idea of business planning is not just the written plan, but a group process that teaches people how to analyse the business, provide tools to repeat the exercise and produce written outcomes and plans that can be measured. 

Business owners and managers should always know what to do in their business, but making sure the right things get done needs a structured process.   The business plan provides this process, but will always require a committed team focused on the task at hand.   That is always the hard role of management, but one that can be made so much easier with the right plans.

Maxell Consulting has helped many businesses identify the value in their business and empower the owners to develop plans to crystallise that value.  

We offer a free assessment of your situation and review what potential value exists within your business.